Balance of Power / Tina McCrossan

| June 01, 2008

Hotel Online Special Report Balance of Power This article is from the Summer 2008 issue of Hospitality Upgrade magazine.To view more articles covering technology for the hospitality industry please visit the Hospitality Upgrade Web site or to request a free publication please call (678) 802-5307 or e-mail. By Tina McCrossan, June 2008Capital planning for technology has become quite an adventure. Brands define technology and vendor standards. GMs decide what they need now. Owners and asset managers decide what to actually fund. These three key constituencies have different motivations and the power to thwart the desires of others. Today, revenue performance risk is creating an interesting brew of motivations and the relationship dynamics are changing. GMs are postponing non-ROI projects and looking for tools to help stay on their numbers. Brand CIOs are trading off technology refresh dollars and are becoming flexible on brand standards. Meanwhile the third party in the balance of power, asset managers, stands ready to fund any ROI-based technology project. The balance of power challenge is built into the history of the relationship. Brand CIOs define vendor standards and project priorities after exhaustive evaluation processes. They want GMs to place these projects in their budgets and owners to fund them. Owners want ROI commitments on anything they fund and faster brand technology review cycles on projects and strategy adjustments they sponsor. GMs want whatever projects are being pushed by brands or owners to work as represented and not be a burden for their property team. Historically, satisfying everyone’s expectations has been a frustrating process. Communication between brands, owners and management companies has been improving. VP Information Technology at Thayer Lodging Group Mike Uwe Dickersbach said, “Marriott’s approach to organizing IT-specific meetings with ownership groups is a great form of communication by the brand. Owners need to be involved in the brand’s technology strategy process.” In addition these entities may all have their own CIOs indicating the growing importance of technology in their business strategy.Brand CIOs have a difficult challenge. They need to set standards and define project priorities so the brand moves forward cohesively. They have to satisfy the needs of a wide spectrum of properties, which often dictates feature-rich, high-cost and complex solutions. Often their partners struggle with a one size fits all solution strategy.It’s not easy for owners either. Having many brands in their portfolio exposes them to lots of technology standards. Their asset managers pay close attention to improvements or problems at their assigned properties and seek to understand the causes. VP Asset Management Chartres Lodging Group Cody Bradshaw has been part of the balance of power for years. He focuses on the GM relationship and finds new things to try when a brand standard doesn’t seem to fit or an opportunity to improve performance is recognized. Bradshaw’s challenge comes when a brand steps in to make an evaluation before a project can proceed. In this situation Chartres is ready to write the checks, the GM wants it, but the brand has to bless it. Bradshaw said, “The biggest challenge for us is when a brand halts a project to complete an evaluation. A one- or two-year delay in rolling out a project may cause an opportunity to be missed.”Early pioneers in the asset manager role have witnessed a lot of change over the years. In the beginning, asset managers had little power. Today they have a voice and although this means teams must cooperate and communicate, it can yield a better result. Asset managers focus on what is being purchased and want GMs to agree with the return expectation. Bradshaw said, “Today asset managers are more technology literate and recognize the power of technology to positively impact performance. Owners are ready to fund technology when their GMs are willing to sign up for the ROI.” Tina McCrossan is the CEO of Cross Hospitality. She can be reached at [email protected].

Balance of Power Tina McCrossan is the CEO of Cross Hospitality. She can be reached at [email protected]. Geneva Rinehart Managing Editor Hospitality Upgrade magazine and the Hospitality Upgrade.com website http://www.hospitalityupgrade.com/ [email protected] Also See: The Revolution is Underway in Video Services / Ashok Kumar / March 2008

Is There a Return on Investment? / Michael Schubach / March 2008

Balance of Power / Tina McCrossan

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